Greaves Cotton Ltd (GREAVESCOT) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to Greaves Cotton Limited Q2 and H1 FY '27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Kale, Head Investor Relations, Greaves Cotton Limited. Thank you, and over to you, sir.
Ashish Kale (Greaves Cotton Limited): Thank you, Iqra. Good afternoon, ladies and gentlemen, and a very warm welcome to Greaves Cotton's Q2 FY '27 earnings conference call. The financial results and the investor presentation for the quarter ended 30th September 2026 have been filed with the stock exchanges and are also available on the company's website. I hope you have had an opportunity to review them. From the management team today, we have with us Mr. Parag Satpute, MD and Group CEO; Mr. Vikas Singh, MD of Greaves Electric Mobility Limited; and Mr. Manish Poddar, Group CFO. We'll begin with opening remarks from the management, following which we'll open the floor for questions. Before we begin, a brief disclaimer. Today's discussion may contain certain forward-looking statements relating to the company's business prospects, strategy, and financial performance. These statements are subject to risks and uncertainties, and actual results may differ materially. We request participants to refer to the disclaimer included in the investor presentation. I will now hand over the call to Parag to take us through the performance of the company and the progress on our strategic priorities. Over to you, Parag.
Parag Satpute (Greaves Cotton Limited): Thank you, Ashish. And good afternoon, everyone, and thank you for joining us today. Quarter two has been
Parag Satpute (Greaves Cotton Limited): Another quarter of strong business momentum, and we see continued progress in the execution of our strategy named Greaves.Next. Let me begin with three key messages for this quarter. The first one, we delivered a strong revenue growth across our businesses and we see very encouraging momentum in all key growth segments. Secondly, we continue to advance Greaves.Next with tangible progress in new products, engineering capabilities, international expansion, and strengthening of our business platforms. Thirdly, while our growth momentum remains strong, profitability continued to face pressure from rising input costs. The corrective actions we had initiated started showing results, but continued cost inflation has offset some of these gains. I can assure you that improving profitability remains an important management priority. Now, let me begin with the headline numbers. At a consolidated level, we recorded a revenue of 1,176 crores, representing a year-on-year growth of 44%. For the first half of this year, consolidated revenue came in at 2,150 crores, which is 38% growth. Importantly, our core businesses continued to demonstrate strong momentum, growing 24% year-on-year in quarter two and 20% during the first half. This represents an acceleration from the growth we reported in quarter one, and therefore reinforces our confidence in the underlying strength of our business. As I have shared in earlier calls, Greaves.Next is about building on our strong engineering and manufacturing heritage to create a more diversified and a technology-led Greaves. Our focus has been on accelerating the core businesses, building new capabilities and creating additional avenues for sustainable growth. I'm happy to say we are now seeing these priorities translate into tangible business outcomes. So let me take you through the performance of the three core business segments. As usual, I'll start with energy solutions. This business continued its strong growth momentum and we saw healthy demand across infrastructure, manufacturing, commercial and industrial applications. During this quarter, Energy Solutions grew 36% year-on-year compared with the 21% growth in the previous quarter. One of our strategic priorities within this business has been to strengthen our position in the medium to high horsepower genset market. And I'm very pleased to share that our medium horsepower, which we call MHP genset portfolio covering the 160 to 750 kVA range, grew 35% during the first half of FY27, compared to a 28% growth of the overall business. This is encouraging as it demonstrates the traction we are gaining in the market segments where we have deliberately chosen to strengthen our presence. International expansion is another priority for this business. And during this quarter, we completed the first batch of enhanced gensets developed for the key market in the Middle East. This is again a tangible step forward and we will build on our export presence to strengthen our ability to serve international customers. Overall, we remain positive about the opportunity in Energy Solutions. Our focus will be on sustaining this growth, continuing to strengthen our competitive position, and building a larger domestic and international business. Moving on to Mobility Solutions. Here, our strategy is to leverage our established OEM relationship and our engineering capabilities. We believe different powertrain technologies will coexist for the foreseeable future, our approach therefore to remain competitive in existing applications while developing capabilities required for new technologies. Along these lines, our automotive engine business delivered another strong quarter, growing 37% year-on-year, supported by healthy demand across three-wheeler and four-wheeler applications. During this quarter, we also launched a new 470 cc diesel engine for three-wheeler applications, further strengthening our product offering. I will now turn to engineered components within our Mobility Solution space, the company that you know as Excel Control Linkages. Excel delivered a very strong quarter with a 30% year-on-year growth
Parag Satpute (Greaves Cotton Limited): 30% in Q1 and reflects the progress being made in strengthening the business. During this quarter, we completed the acquisition of 20% of the stake in Excel, now making it a wholly owned subsidiary of Greaves Cotton. This is an important strategic milestone for us. As we have outlined in Greaves.Next, we see a significant opportunity to build a stronger automotive components business. Our strategy here is to progressively move up the value chain from individual components such as control cables towards more high value-added assemblies and integrated engineering solutions. And Excel provides us with an established platform, strong customer relationships, and the engineering capabilities to pursue this opportunity. We intend to build on this foundation through organic growth, deeper customer engagement, and selective opportunities to broaden our capabilities. So overall Mobility Solutions grew 23% year on year during Q2 compared with the 18% in Q1. I will move to Industrial Solutions now. The reported revenue here remained broadly flat year on year during the quarter. However, if you remember, we had taken some portfolio rationalized decisions rationalization decisions earlier. So if you adjust for that, the business delivered a 9% like-for-like growth. Our focus on Industrial Solutions is to be is to strengthen the portfolio through differentiated products and specialized applications and selective international opportunities. During this quarter, therefore, we launched a new 750 HP fire fighting engine and unveiled prototypes for a 160cc gasoline engine. These developments reflect our ongoing efforts to broaden the product portfolio and get into new customer applications. We see opportunities in segments where reliability, durability, and engineering precision are very important and where our manufacturing and product development capabilities can provide us a competitive edge. We will continue to focus on these priorities. So that was the business segments. Let me talk now about profitability. While we are encouraged by the strong revenue growth across our business, margins remained under pressure during the quarter. As we discussed in our previous call, we had initiated a series of actions covering pricing, cost optimization, and operating efficiency to address the impact of rising input costs. These actions have started delivering results, particularly on the pricing front. However, commodity and other input costs have continued to rise, offsetting some of these gains. And therefore, the improvement in margins has been slower than we had anticipated. We are responding to this, and we continue to focus on pricing discipline, value engineering, and productivity improvements along with tight cost management. At the same time, we are maintaining a clear distinction between costs that can be optimized and investments that are essential for our future competitiveness. Now as we move into the second half of the year, improving profitability and converting our strong revenue growth into better operating earnings will be a key management priority. We believe the actions we are taking are directionally right, and we remain focused on accelerating their impact while navigating the evolving cost environment. Our CFO, Manish, will provide further details on the financial performance and margin improvement initiatives in a little bit. Let me briefly touch upon the investee businesses. Greaves Electric Mobility and Greaves Finance remain important components of our broader portfolio and our ambition to participate in the evolving mobility ecosystem. During the quarter, we completed the investment in Greaves Electric Mobility that we had discussed in our previous call. Our focus remains on supporting the development of this business while maintaining discipline around capital allocation and long-term value creation. Vikas will take you through the performance of Greaves Electric Mobility in greater detail soon. Now let me step back a little bit from these quarterly numbers and share a few thoughts on the broader progress of our strategy Greaves.Next. When we embarked on this transformation, our ambition was to build on Greaves' strong industrial and engineering heritage while repositioning the group for opportunities emerging in energy and mobility. We recognize that this would require not just a sharper business strategy, but also new capabilities, stronger leadership, improved execution,
Parag Satpute (Greaves Cotton Limited): translate into tangible business outcomes. So, across the businesses, the common theme is clear. We are progressing, increasing the engineering contact, differentiation, and value addition in our portfolio. Touching upon capital allocation then, like I said, we completed investments in Greaves Electric Mobility and acquired the remaining stake in Excel Control Linkage. Both of these investments are very well aligned with our strategic priorities. At the same time, we continue to evaluate opportunities to strengthen our business portfolio through partnerships and selective inorganic growth. Our approach to these opportunities will remain disciplined. We will focus on businesses and capabilities that are strategically relevant, which will complement our strengths and offer potential for sustainable returns. We are very conscious that long term shareholder value is created not simply through growth, but through quality of the growth and the returns generated on the capital deployed. This will remain an important consideration as we take Greaves.Next forward. We remain committed to executing on this agenda with speed and simplicity and the discipline that underpins Greaves.Next. So, with that, I complete the update on the Greaves core business. I will now hand over to Vikas who will take you through the performance of Greaves Electric Mobility. Over to you, Vikas.
Vikas Singh (Greaves Electric Mobility Limited): Thank you, Parag. Good evening, everyone. Once again, thank you very much for joining us today. It's a pleasure to be sharing the results of Greaves Electric Mobility on behalf of the team with you. I'm pleased to share that the momentum at Greaves Electric Mobility continues to build, with each quarter setting a new benchmark. Q2 FY '27 was our highest ever quarter for volumes and also on top-line across both our electric two-wheeler and our L5 3-wheeler businesses. E2W businesses recorded volumes of over 37,000 units with a 114% year-on-year growth for Q2 '27, while the L5 3-wheeler business recorded nearly 2,800 units at 61% year-on-year growth. Let me try and Let me begin with sharing some of the updates on the key drivers of our record volume numbers before moving into the financials. In the electric 2-wheeler segment, our registration volumes on VAHAN also doubled and grew at 107% year-on-year in H1 '27 over '26 to almost about 53,700 units. Our H1 billing volumes reached almost 91% of our full year '26 volumes in this period. Our market share improved to 4.8% in H1 '27 versus 4.1% in H1 '26 with a peak market share of 5.6% in June '26. As you can see, there has been a steady and continuous build up in share as we keep going along. We have established pockets of market leadership in certain highly challenging markets. We are a top two player in Tamil Nadu and Bihar for Q2 '27 and ranking number one in Bihar at about an 18% share and number two in Tamil Nadu at about 15% share, while also having a 7% plus share for Southern and Eastern markets, which contribute to just about half of the overall industry volumes. Beyond this, very importantly, we rank amongst the top three E2W players in about 35% of the RTOs that we serve and have, on top of this, gained share year-on-year in over 60% of the RTOs that we serve. So, once again, as per plan, well on course to building share in a sustained and steady basis. This growth has been driven by several key initiatives: network, alternate channels, new product introductions, and building on the low-speed segment growth. Our network is growing rapidly both in terms of number of dealers as well as the average throughput per dealer. In H1 '27, we issued LOIs for 160 new dealerships while the existing dealers also opened nearly 20 new branches. Very importantly again, dealer throughput has improved by almost 40% year-on-year per dealer from 18 to 25 units per month. Our B2B volumes also grew 18% year-on-year in H1 with multiple new fleet accounts reducing our
Vikas Singh (Greaves Electric Mobility Limited): ence on any single customer. We have also ramped up our presence on e-commerce platforms, which have helped drive almost three times the volume growth over same period last year. In the slow-speed segment, Reo Li Plus has been well received by customers as a safe and reliable option and has played a critical role in our growth journey. Alongside the core scooter business, we have built additional levers for revenue and margins through the introduction of IoT solutions on our products and various accessories, which are generating significantly higher margins while driving incremental realizations. In our L5 three-wheeler business too, quarter two was our highest ever quarter, with a billing of about 2,800 units, up 61% year-on-year, whereas VAHAN registrations increased by 74% year-on-year. Our focus now firmly relies in strengthening our network in northern and eastern regions, where the larger share of the EV industry volumes currently reside. With this, I now move on to our financials. Our consolidated revenue in H1 '27 is at almost 680 crores versus 335 crores same time last year. Our two-wheeler revenue in Q2 moved up 134% year-on-year and was at 350 crores. And our L5 three-wheeler revenue moved up 55% year-on-year and was at almost 60 crores. At an H1 level consol, we're growing at almost about 103% with a 130% plus growth in the two-wheeler segment. The increased scale benefits are flowing through to our bottom line as evident from our unit economics trajectory. Our average realization in E2W for the quarter improved by 5,000 rupees to roughly about 93,000 per unit without any compromise on our volumes. Our EBITDA losses per unit in two-wheeler have come down by 70% in Q2, from roughly about 20,000 per unit to less than 6,300 per unit, indicating a strong path, strong and quick path to profitability. Our EBITDA margins in E2W have also come down or our EBITDA losses have significantly come down from roughly about 24% negative in Q2 '26 last year to -7% in Q2 this year. Our overall cash burn for the E2W business has touched a record low single-digit per month, and we expect that to break even fairly soon. On the technology front, our R&D team has secured a design registration for the new ferrite-assisted synchronous reluctance motor, developed in-house. This is essentially a rare-earth element-free motor. This motor architecture, besides using no rare-earth magnetic material, also lowers our dependence on imported rare-earth minerals from China and deepens the localization of our power train. Deployment will begin with our two-wheeler portfolio very soon, followed through with new product introductions in Q4 '27. We have also upgraded our scooters with new performance and technology features under like intelli-Pack, our connectivity suite. The upgraded, the new upgraded Nexus EX Plus comes with a more powerful 5-kilowatt motor with higher gradability, along with intelli-Pack. The Magnus GMax, with intelli-Pack, offers over 30-plus connectivity features through the Ampere Connect app, including cruise control, hill-hold assist, find my scooter, turn-by-turn navigation, and remote vehicle diagnostics. Together, these vehicles make our scooters durable, reliable, and technology-forward for all terrains and weather conditions that India has to offer. On the brand front, we embarked on an Ultimate Endurance ride with the all-new Magnus GMax. The vehicle covered 4,400-plus kilometers from Dong Valley in Arunachal Pradesh in the east to Guhar Moti in Gujarat, validating the superior reliability, durability, and technology of the product. We amplified the product campaigns with print advertising in key markets and with outdoor support and digital campaigns, garnering over 3 million views on social media. In September '26, Ampere also recorded its highest ever brand searches, up 23.6% above August '26. But very importantly, this culminated in our website traffic nearly doubling from H1 last year to H1 this year, from 1.1
Vikas Singh (Greaves Electric Mobility Limited): million to 2.1 million for the year. Finally our scooters continue to earn recognitions. The Nexus was named Family Scooter of the year 2026 at the Times Drive Auto Summit Awards and we are proud to offer award winning electric scooters to our Indian customers. Our vehicles are truly built for Bharat. We remain committed to profitable and sustainable growth and to building an electric mobility company that delivers lasting value for all our stakeholders. Thank you.
Manish Poddar (Greaves Cotton Limited): Okay, so thank you, Vikas. Hi, this is Manish Poda. Good evening everybody. On the financial performance, I'll quickly just run you through on the console basis. We have our revenue increased 44% Y-o-Y from 1,166 crores to 815 crores in Q2. Correspondingly, for H1, consolidated revenues stand at 2,150 crores, a 38% increase over 1,561 crores corresponding period last year. EBITDA margin also showed robust growth of 43% Y-o-Y despite commodity pressures through H1 this year. On QoQ basis, the improved EBITDA margin marginally from 5.8% in Q1 to 6.2% in Q2 on a console basis. For our core business, we reported a 768 crores of revenue compared to 621 crores earlier last year, representing a 24% increase. Similarly for H1, we grew at 20 20% 1,478 crores compared to 1,233 crores. Greaves Electric Mobility on a consol basis also reported a 410 crore revenue, up 106% versus 199 crores last year quarter two. On margins, the impact of commodity inflation and lag in passing on to the higher cost continued in Q2. We began implementing price increases in parts for the business during the quarter and shall continue through rest of the year. However, pricing arrangements in B2B stroke OEM ecosystem typically operate with with a lag. We therefore expect the full companywide benefit of these actions to be reflected by Q4 of FY '27. Alongside pricing increase, we have intensified our cost optimization, value engineering programs to support profitability. Reflecting these pressures, core business EBITDA margin was at 11.5% in Q2 compared to 14.8% a year ago. In EV business, stronger scale has translated into marked improvement in operating performance. In absolute terms, despite the revenue doubling, its absolute EBITDA narrowed from a loss of 25 crores to a loss of 25 crores compared to 42 crores negative last year. We also recognized certain exceptional stroke non-recurring expenses in Q2 of financial year '27 that affected reported profits before tax. Following a further review of the brands, goodwill, and other intangible assets, we accelerated amortized amortization of relevant intangible assets and recognized impairment charges against carrying value of brands and goodwill. We also had a one-off expense charge linked to the planned IPO for GEML. The resulting impact on GCL's consolidated profit consolidated financial statements comprised 27 crores of accelerated depreciation and 33 crores of exceptional item. Kindly refer slide number 34 for further details and notes to the published accounts. Moving on to the capital allocation, we invested 331 crores in GEML's rights issue and we we invested 112 crores to acquire the balance 20 20% stake at Excel Controlink. On investor disclosures, we earlier introduced revised segment, a separate core business profit and loss statement, a three-year revenue bridge, and a separate disclosure on the conventional three-wheeler diesel engine business in Q1. Starting this quarter, we are also providing additional operational and financial information on GEML along with the select indicators for the core business. We understand We continue to be guided by the investor feedback to enhance disclosures to enable better understanding of our business. With this, I hand over back to Iqra, our moderator.
Moderator: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone.
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